Mastering the Commercial Margin

The commercial margin is defined as the difference between the total amount of the booking and the payments made to third parties (owner, suppliers, taxes, and intermediaries) as stipulated in the contract. It may differ from the agency commission, since certain items (extras, taxes, or specific expenses) are not included in the calculation of the commercial margin, even though they are part of the commission.

Settling with owners is not just an accounting obligation but also an act that builds trust. In Avantio, this process is simplified as long as you use the right tools and follow the correct steps.

What is a settlement?

A settlement is the balance between the payments the agency must make to the owner (income from bookings) and the deductions that must be applied (agency commission, owner expenses, and prepayments). In the settlement, payments to the owner are recorded as "credit" and expenses covered by the agency on their behalf are recorded as "debit." Think of the settlement as a snapshot of the financial relationship between the agency and the owner.

Identifying Pending Settlements

Before creating a new settlement, review the accommodations with bookings that have not yet been settled:

Log in to VRMS.
Go to the "Accommodations pending settlement" section.
You will see a list with the owner, accommodation, and date of the last settlement.
Click "Settle" to open the preview, which will include:
- Bookings ready to be settled.
- Expenses charged to the owner (if any).
- Prepayments recorded (if any).

You can choose to settle all or only some bookings/expenses, leaving others for the next settlement.

How to Create a New Settlement

You have two ways to start: from "New settlement" or from "Accommodations pending settlement." In both cases, the result will appear in the same final list.

Steps:

Set filters: owner or accommodation, settlement period, and status of bookings to include.
The system will include confirmed and paid bookings by default. If you wish, you can include cancelled and disputed bookings.
Review the preview before confirming.

Common mistakes
A frequent mistake is trying to settle pre-bookings, but these are not included in the settlement process.

How the Settlement is Calculated

When you confirm the settlement, the system will automatically calculate according to what is set in the contract:

Total bookings to be settled.
Minus expenses charged to the owner.
Minus (or plus) prepayments recorded.

The result is the net amount the agency must pay the owner.

You can leave the settlement marked as "unpaid" even after closing it in the system, and update it to "paid" when you make the transfer.

List of Completed Settlements

Once the settlement is generated, the accommodation disappears from the "Pending" list and automatically moves to "Completed Settlements." This makes it easy to keep a clear record of what still needs to be resolved and what is already closed. Check this section regularly to verify the status of settlements and catch errors early.

With this process, you’ll have full control: you’ll easily spot which accommodations are ready to be settled, create settlements in just a few clicks, and keep an organized history for future reference.

Transparency and order add value to your relationship with owners.